Effect of the Gig Economy on the Wage-Setting Curve
The emergence of insecure employment, such as in the gig economy, contributes to a downward shift of the wage-setting (WS) curve. This shift occurs because these forms of work lower the reservation wage of workers, weakening their bargaining position and outside options.
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Introduction to Macroeconomics Course
Ch.2 Unemployment, wages, and inequality: Supply-side policies and institutions - The Economy 2.0 Macroeconomics @ CORE Econ
The Economy 2.0 Macroeconomics @ CORE Econ
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Net Effect on Inequality: Comparing Profit Share and Unemployment Effects
Figure 2.25: Lorenz Curves for Initial and New Equilibria
Analyzing Modern Labor Market Dynamics
A national economy sees a significant expansion of the 'gig economy,' where workers are often classified as independent contractors. This trend is associated with a decrease in workers' collective bargaining power and an increase in the market power of the platforms that hire them. According to the wage-setting (WS) and price-setting (PS) model, what is the most likely combined outcome of these changes on the labor market equilibrium?
Evaluating Labor Market Trends and Inequality
Within the wage-setting and price-setting framework, a simultaneous increase in firms' market power and a decline in workers' collective bargaining power—trends often associated with the growth of a 'gig economy'—will necessarily result in a higher equilibrium rate of unemployment.
Deconstructing Labor Market Shifts and Inequality
Match each labor market trend to its specific consequence within the wage-setting (WS) and price-setting (PS) framework.
A national economy experiences a rapid expansion of its 'gig economy,' characterized by a decline in workers' collective bargaining power and an increase in firms' market power. According to the wage-setting and price-setting framework, arrange the following events in the logical sequence that describes the impact on the labor market and income distribution.
A government, observing rising inequality alongside the growth of the 'gig economy,' enacts a policy that significantly enhances the collective bargaining power of gig workers. Assuming no other changes, which statement best evaluates the most likely outcome within the wage-setting (WS) and price-setting (PS) framework?
Reconciling Stable Unemployment with Rising Inequality
In the wage-setting and price-setting framework, when increased corporate market power and a weaker worker bargaining position (trends associated with the gig economy) occur simultaneously, the factor that most directly explains the resulting increase in income inequality is the higher ____.
Effect of the Gig Economy on the Wage-Setting Curve
Learn After
Imagine an economy where a significant portion of the workforce transitions from stable, long-term employment to more insecure, short-term 'gig' work. In a model representing the real wage that firms must offer to secure effort from employees at various levels of economy-wide employment, what is the most likely consequence of this trend and why?
Gig Economy's Impact on Worker Incentives
The proliferation of app-based freelance platforms, which offer flexible but often insecure work arrangements, strengthens the bargaining position of the average worker. This empowerment leads to an upward shift in the curve that represents the real wage firms must pay at each level of employment to secure adequate worker effort.
Labor Market Impact of a New Ride-Sharing App